Text Size

-

+

reset

Utah says it doesn’t want to do much to alter its existing exchange, which it started for small businesses before President Barack Obama’s health care law was enacted in 2010. Gov. Gary Herbert’s administration says it’s ready to add individual coverage, but not much else.

So Utah has become a test of how much flexibility the Obama administration is willing to give to states so they’ll agree to build these centerpieces of the health care law — the new health insurance marketplaces for people who don’t have another source of coverage.

While the administration would probably love to see another Republican governor volunteer for a state-based exchange instead of ceding the responsibility to the feds, Affordable Care Act supporters and detractors don’t see how Utah could win the Obama administration’s approval without taking major steps to incorporate the law’s insurance market reforms.

“What Utah calls an exchange is not an exchange,” said Jay Angoff, the first director of the HHS office overseeing exchanges. “It doesn’t meet the criteria of the ACA. It’s nowhere near it.”

The Wall Street Journal editorial page had a similar assessment this week, pegging Utah’s chances of getting HHS approval at “approximately zero.”

The Utah exchange shares the same basic concept as the insurance marketplaces included in the ACA — they’re both online portals to shop and compare health plans — but it falls short of the closely regulated markets prescribed in the federal law. The Utah exchange offers coverage only for small businesses, while ACA exchanges also must cover individuals.

The federal law also sets tougher requirements on benefits that participating health plans must offer and how much they can charge customers, and exchanges must provide subsidies for individuals to purchase insurance — a task that Utah says should be left entirely to the feds.

The Utah case isn’t just about whether HHS will have to run yet another state’s exchange. The way the Obama administration handles Utah’s application could have broader implications for Republican states that might be open to setting up their own exchanges in the future.